Daily Trading Coach

BRETT N. STEENBARGER, PHD, is Associate Professor of Psychiatry and Behavioral Sciences at SUNY Upstate Medical University in Syracuse, New York. An active trader and author of the popular TraderFeed blog, Steenbarger coaches traders in hedge funds, proprietary trading groups, and investment bank settings. He is also the author of the Wiley titles Enhancing Trader Performance and The Psychology of Trading. Steenbarger received a BS from Duke University and a PhD in clinical psychology from the University of Kansas.

• Preface xiiiAcknowledgments xviiIntroduction 1Chapter 1 Change: The Process and the Practice 3Lesson 1: Draw on Emotion to Become a Change Agent 4Lesson 2: Psychological Visibility and Your Relationship with Your Trading Coach 7Lesson 3: Make Friends with Your Weakness 9Lesson 4: Change Your Environment, Change Yourself 11Lesson 5: Transform Emotion by Trace-Formation 14Lesson 6: Find the Right Mirrors 17Lesson 7: Change Our Focus 20Lesson 8: Create Scripts for Life Change 23Lesson 9: How to Build Your Self-Confidence 25Lesson 10: Five Best Practices for Effecting and Sustaining Change 29Resources 32Chapter 2 Stress and Distress: Creative Coping for Traders 33Lesson 11: Understanding Stress 33Lesson 12: Antidotes for Toxic Trading Assumptions 37Lesson 13: What Causes the Distress That Interferes with Trading Decisions? 40Lesson 14: Keep a Psychological Journal 43Lesson 15: Pressing: When You Try Too Hard to Make Money 45Lesson 16: When You’re Ready to Hang It Up 48Lesson 17: What to Do When Fear Takes Over 51Lesson 18: Performance Anxiety: The Most Common Trading Problem 54Lesson 19: Square Pegs and Round Holes 58Lesson 20: Volatility of Markets and Volatility of Mood 61Resources 64Chapter 3 Psychological Well-Being: Enhancing Trading Experience 67Lesson 21: The Importance of Feeling Good 67Lesson 22: Build Your Happiness 71Lesson 23: Get into the Zone 73Lesson 24: Trade with Energy 77Lesson 25: Intention and Greatness: Exercise the Brain through Play 79Lesson 26: Cultivate the Quiet Mind 83Lesson 27: Build Emotional Resilience 86Lesson 28: Integrity and Doing the Right Thing 89Lesson 29: Maximize Confidence and Stay with Your Trades 91Lesson 30: Coping—Turn Stress into Well-Being 95Resources 97Chapter 4 Steps toward Self-Improvement: The Coaching Process 99Lesson 31: Self-Monitor by Keeping a Trading Journal 99Lesson 32: Recognize Your Patterns 103Lesson 33: Establish Costs and Benefits to Patterns 106Lesson 34: Set Effective Goals 109Lesson 35: Build on Your Best: Maintain a Solution Focus 111Lesson 36: Disrupt Old Problem Patterns 114Lesson 37: Build Your Consistency by Becoming Rule-Governed 118Lesson 38: Relapse and Repetition 121Lesson 39: Create a Safe Environment for Change 123Lesson 40: Use Imagery to Advance the Change Process 126Resources 130Chapter 5 Breaking Old Patterns: Psychodynamic Frameworks for Self-Coaching 131Lesson 41: Psychodynamics: Escape the Gravity of Past Relationships 132Lesson 42: Crystallize Our Repetitive Patterns 135Lesson 43: Challenge Our Defenses 138Lesson 44: Once Again, with Feeling: Get Distance from Your Problem Patterns 141Lesson 45: Make the Most Out of Your Coaching Relationship 144Lesson 46: Find Positive Trading Relationships 147Lesson 47: Tolerate Discomfort 150Lesson 48: Master Transference 153Lesson 49: The Power of Discrepancy 156Lesson 50: Working Through 158Resources 161Chapter 6 Remapping the Mind: Cognitive Approaches to Self-Coaching 163Lesson 51: Schemas of the Mind 164Lesson 52: Use Feeling to Understand Your Thinking 167Lesson 53: Learn from Your Worst Trades 170Lesson 54: Use a Journal to Restructure Our Thinking 172Lesson 55: Disrupt Negative Thought Patterns 176Lesson 56: Reframe Negative Thought Patterns 179Lesson 57: Use Intensive Guided Imagery to Change Thought Patterns 182Lesson 58: Challenge Negative Thought Patterns with the Cognitive Journal 185Lesson 59: Conduct Cognitive Experiments to Create Change 188Lesson 60: Build Positive Thinking 190Resources 193Chapter 7 Learning New Action Patterns: Behavioral Approaches to Self-Coaching 195Lesson 61: Understand Your Contingencies 196Lesson 62: Identify Subtle Contingencies 199Lesson 63: Harness the Power of Social Learning 201Lesson 64: Shape Your Trading Behaviors 204Lesson 65: The Conditioning of Markets 207Lesson 66: The Power of Incompatibility 211Lesson 67: Build on Positive Associations 214Lesson 68: Exposure: A Powerful and Flexible Behavioral Method 217Lesson 69: Extend Exposure Work to Build Skills 220Lesson 70: A Behavioral Framework for Dealing with Worry 223Resources 226Chapter 8 Coaching Your Trading Business 227Lesson 71: The Importance of Startup Capital 227Lesson 72: Plan Your Trading Business 231Lesson 73: Diversify Your Trading Business 233Lesson 74: Track Your Trading Results 236Lesson 75: Advanced Scorekeeping for Your Trading Business 240Lesson 76: Track the Correlations of Your Returns 244Lesson 77: Calibrate Your Risk and Reward 248Lesson 78: The Importance of Execution in Trading 250Lesson 79: Think in Themes—Generating Good Trading Ideas 254Lesson 80: Manage the Trade 257Resources 259Chapter 9 Lessons from Trading Professionals: Resources and Perspectives on Self-Coaching 261Lesson 81: Leverage Core Competencies and Cultivate Creativity 261Lesson 82: I Alone Am Responsible 264Lesson 83: Cultivate Self-Awareness 271Lesson 84: Mentor Yourself for Success 275Lesson 85: Keep Detailed Records 279Lesson 86: Learn to Be Fallible 283Lesson 87: The Power of Research 286Lesson 88: Attitudes and Goals, the Building Blocks of Success 290Lesson 89: A View from the Trading Firms 295Lesson 90: Use Data to Improve Trading Performance 300Resources 305Chapter 10 Looking for the Edge: Finding Historical Patterns in Markets 307Lesson 91: Use Historical Patterns in Trading 308Lesson 92: Frame Good Hypotheses with the Right Data 310Lesson 93: Excel Basics 313Lesson 94: Visualize Your Data 317Lesson 95: Create Your Independent and Dependent Variables 320Lesson 96: Conduct Your Historical Investigations 324Lesson 97: Code the Data 327Lesson 98: Examine Context 329Lesson 99: Filter Data 332Lesson 100: Make Use of Your Findings 334Resources 336Conclusion 339Lesson 101: Find Your Path 339For More on Self-Coaching 341About the Author 343Index 345